DIA proposal could ask state for up to $500M in relief for bankrupt Detroit

The Detroit Institute of Arts is asking the state to give Detroit money to prevent the museum's collection from being sold during the city's Chapter 9 municipal bankruptcy case.

The funding proposal, which has been presented to advisers of Gov. Rick Snyder, does not specify how much money would be needed, but it could require hundreds of millions of state dollars for Detroit over 20 years, said Annmarie Erickson, the DIA's chief operating officer.

"We have been told by the emergency manager's office that they would like the DIA to provide $400 million to $500 million in relief for the city, so that's the number we are looking at," she said.

In exchange for the state funding, the DIA would offer educational and conservation programming across Michigan. Erickson said the DIA "would find a way to fund those programs." Erickson said she did not know whether the state would require that it take ownership of the DIA collection in exchange for the funding.

Dave Murray, deputy press secretary for Gov. Rick Snyder, said the administration has not seen a formal proposal.

“The governor is always open to ideas… that would help the city with its reinvention,” Murray said. “When people are ready to make a formal proposal we will take a look at it.”

Ari Adler, press secretary for House Speaker Jase Bolger, R-Marshall, said in a statement that if a proposal includes making the collection a state asset, lawmakers "would need to look at whether it is a sound and proper investment for the state taxpayers."

Amber McCann, press secretary for Senate Majority Leader Randy Richardville, R-Monroe, said Richardville has not seen the DIA proposal or been approached by anyone from the DIA about it. McCann said while Richardville is supportive of the DIA and considers it an incredible treasure for the city and the state, he would "look carefully before the state would entertain the shifting of ownership, or dedicating state revenue" toward it.

In May, Richardville introduced SB 401, which seeks to amend the Art Institute Authorities Act of 2010 to require an art institute in the state — namely the DIA — to adhere to the code of ethics for museums that is published by the American Alliance of Museums or a successor organization. It also states that a facility owned by a municipality where the primary art collection is exhibited, "may not be leased, pledged, mortgaged, or otherwise encumbered," and cannot be sold unless it is done in connection with the relocation of the artwork to a comparable facility inside the same municipality.

That bill was approved by the Senate in June and has been sitting ever since in the House Financial Liability Reform Committee. The chair of that committee, Rep Earl Poleski, R-Jackson, could not be immediately reached for comment today.

Bill Nowling, spokesman for Detroit Emergency Manager Kevyn Orr, said in an email to Crain's that Orr has not specified an amount of money he wants to come from the DIA collection and that Orr has not been briefed on the DIA's proposal.

Nowling also said Orr is willing to consider all DIA proposals that help the city solve its financial crisis. Orr's office is trying to schedule a time to meet with DIA representatives in the coming weeks, Nowling said.

Erickson said DIA representatives will travel to Lansing to meet with state officials and lawmakers on the proposal.

The issue of protecting the DIA's collection gained attention in May when Orr told the DIA and other city-owned assets that they could face exposure to creditors in a Chapter 9 municipal bankruptcy case.

While a federal bankruptcy court can't force the city of Detroit to sell part of the collection, Orr could opt to include a sale as part of a bankruptcy plan of adjustments.

The DIA collection has more than 60,000 pieces and has been valued at more than $1 billion.

News of the proposal comes the day after Orr told attendees of a Detroit Economic Club event that he expects to receive the first of two Christie's Appraisals Inc. appraisals of the DIA collection by the end of October.

A voicemail was left with DIA board Chairman Eugene Gargaro on Friday morning.